The Other segment includes the financial results of Hughes Corporate, Electronic System Products, Inc., and the minority interest in the other companies that were contributed from SkyTerra Communications, Inc., Hughes' predecessor, prior to the separation of SkyTerra and Hughes in February 2006.

Hughes Network Systems, LLC (HNS)

Revenue in Hughes' wholly owned subsidiary, HNS, was $196.8 million in the first quarter of 2006, an increase of $18.6 million or 10% over revenues of $178.2 million in the same period in 2005.

Net income improved by $14.6 million to $0.2 million for the first quarter of 2006, compared to a loss of $14.4 million for the same period in 2005.

EBITDA improved by $18.3 million to $16.2 million for the quarter ended March 31, 2006 from negative $2.1 million for the same period in 2005.

Commenting on the first quarter performance, Pradman Kaul, President and Chief Executive Officer, said, "Overall, we are very pleased with the performance of the company in the first quarter. Revenue growth of 10% over the same quarter last year combined with approximately $18 million growth in EBITDA, underscore the excellent operating results. In addition, we launched the new HughesNet brand for all our broadband services."

Mr. Kaul added, "Our financial results for the first quarter indicate that our key strategic thrusts are working well. We continue to see revenue growth being fueled by our North America Consumer/SMB and International service businesses for the rest of 2006. The cost cutting measures that we took in 2004 and 2005 are producing the desired results as evidenced by the significant improvement in operating and net income."

Grant Barber, Chief Financial Officer, said, "We are pleased with the solid operating results posted in this quarter. In addition, our successful closing of $450 million of senior unsecured notes in early April, allowed us to retire our bank debt of $325 million.

"We also had a successful rights offering of $100 million to repay the Apollo debt borrowed in connection with the purchase of the remaining 50% of HNS' equity from DIRECTV in January 2006. We are confident that, due to these actions, we now have a strong balance sheet with the resources available for us to pursue appropriate strategic initiatives, including SPACEWAY."

HNS operates in two business segments consisting of the very small aperture terminal, or VSAT, segment (including SPACEWAY), which provides satellite-based private networks to large enterprises and broadband Internet access to consumers and small and medium businesses and other business users such as small office and home office users, or SMBs, and the Telecom Systems segment consisting of HNS' mobile satellite systems business unit and its terrestrial microwave business unit.

Revenues in the VSAT segment increased 13%, driven by the strong performance of HNS' North American Consumer/SMB and International businesses. During this quarter, there were more than 36,000 gross additions to HNS' total subscriber base, with a churn of approximately 2%. Increased growth in HNS' Indian and Brazilian subsidiaries contributed to the International revenue growth.

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